Optimising an existing ERP system

Nov 10, 2016

It often happens that an enterprise resource planning (ERP) system is implemented at great expense and effort, only for the improvements in the business to be nominal or even non-existent once the ERP system went live, writes Hein Pretorius, CEO and founder of Onpro Consulting.
There are a usually a number of issues causing the ineffectiveness, with the most common being a reduction of the initial scope to accommodate time and budget constraints. It also happens that an ERP project reaches a point of no return – where going back to the previous system will be more painful and expensive than finishing the new implementation.
An ERP project is effective only when the business experiences benefits – or returns – that far outweigh the ERP investment. These returns include improved competitiveness, a reduction in business limitations, and proof that all stakeholders of the business are embracing the way ahead.
To achieve these returns from an existing ineffective ERP system requires those involved in the project to take a step back and approach it from a different angle.

Create a wider stakeholder list
Most ERP projects are focused on what the system can do for the business. Logical as this may seem, the right way to approach an ERP project is actually to base system requirements on a deep understanding who the key stakeholders are.
Stakeholders are any person or party both inside and outside an organisation that can be impacted by the organisation’s activities. Many forget that customers and suppliers are also stakeholders in an ERP system.
Other external stakeholder groups could include bankers, auditors, and government. Each of these groups will have someone inside an organisation responsible for that relationship, and they will be able to represent the external stakeholder on the ERP project team.

Make stakeholder feedback part of the new roadmap
Once all the internal and external stakeholders have been identified, they should be asked four simple questions:
* What are their strategic business objectives?
* How should the ERP system ideally support their business objectives?
* What are the gaps they experience in the ERP system as it stands now?
* How would they prioritise these gaps in order of importance for their business objectives?
The information collected through this stakeholder engagement process can then be used to develop a comprehensive roadmap and updated business case.

Follow the roadmap, ignore the GPS
The new project roadmap should be dictated by the answers to the four questions, and should never be redirected by a sole voice giving direction.
When involving various parties in the design of a new roadmap, there is always a danger that those who shouts the loudest manages to get the rest of the group to veer off the road that leads to the best interest of the overall organisation.
The motto of the new approach should be quality and real business value over speed.

Check in with stakeholders on a regular basis during the journey
It is important to ensure that transparent collaboration with all stakeholders remains active throughout the process. Continuous improvement initiatives such as ERP projects often lose focus and become derailed when individual stakeholder groups are not looked after, resulting in them withdrawing support.
It is extremely important to take care to not rush into fix mode. This is only possible if all stakeholders are kept up to date with objectives and realistic timelines.
The project roadmap should contain a complete, holistically prioritised gaps list including the stakeholders who own specific gaps and what their reasons are for wanting the gap filled. These gaps should be grouped together logically and project plans developed for each mini project.

Get comfortable with moving one step at a time
Every mini project must go through design and approval stages. Testing is also critically important; especially regression testing where it is ensured that the new functionality does not break or conflict with the current system.
The most important part of improvement projects is training and empowering the people who work with the system. Improvement projects will fail if people do not know how to effectively use the new features or functions.

Make promises before keeping them
The new features and functions built within an ERP environment must have a very good business reason. These reasons must be stated in an easy to understand business case that makes it clear how the ERP system will improve an organisation’s competitiveness.
While the business case and roadmap should show what benefits each project will deliver for the company, it is also important to describe how the project team will ensure that the benefits will actually materialise.

Look back while moving ahead
Once the business case and roadmap has been designed, it is of extreme importance to prove the benefits during implementation to maintain buy in from the company executive who approves the project budget.
Continuously refer back to the business case when reporting on progress and problems. This process should continue after the go live of the project; go back a month later and again six months later to ensure that the benefits that was envisaged has materialised.